- why market thinking is upside down when it comes to Apple and Amazon.com; and
- two examples of the market's senseless selling these days.
May the Worst Man Win Posted at 7:28 a.m. EDT on Friday, Oct. 26 Two great companies, two different standards. One totally rigorous and one not rigorous enough. I am talking about Apple ( AAPL) vs. Amazon.com ( AMZN) and the way Wall Street perceives the two. First, Apple reported a number that was extraordinary by any means, except by the means of Wall Street, where it was considered horribly disappointing, as if the company is a bunch of brainless, arrogant bozos who couldn't shine Steve Jobs' shoes. IPads, iPods, iMacs, iPhones, iTV all below to well below what the Street was looking for. Throughout the call there were several undercurrents. Let me tick them down.
- The company has too many products, mostly with wrong price points that aren't selling well.
- Apple has either made too many devices and they aren't selling or it didn't order enough and weren't ready for the onslaught, two mistakes that are considered equally poor.
- Apple's iPads are slowing dramatically, there is a glut developing and the overpriced iPad mini doesn't help the cause.
- Apple's current iPhone is a bust and the Samsung competitor is much better.
- Apple's $120 billion in the bank is simply burning a hole in the pocket of the company and is another sign that it doesn't know what it is doing.
- Tim Cook is an empty suit and we have seen the end of the Steve Jobs products.
A Market Beholden to Fear Posted at 11:55 a.m. EDT on Friday, Oct. 26 When is enough selling enough? When do you oversell? I keep thinking of some of the quarters that were reported and how sellers came in both before and after, and how wrong the sellers were before and how wrong they could be after. I keep thinking about two different examples this week that, frankly, are horrifying to me as an investor because they show how the market is totally beholden to scared people who don't know what they fear other than the fear of other sellers. The first instance is Broadcom ( BRCM). When it reported, the quarter was a clean beat and raise, mostly because it is levered to all of the sales being made in smartphones, and Apple ( AAPL) and Samsung are its biggest and best clients. We all know it has the finest technology, and CEO Scott McGregor is highly regarded in the industry. When the company reported, it immediately ticked up, as it should have given it's the only semiconductor to deliver on expectations and then some. The stock moved to $34 from $33.50 in the few minutes between the opening and when I interviewed McGregor. I joked with him how in this market, even as the company totally delivered on its forecast, there would be someone disappointed and another one scared, so why not take some of your $2 billion dollar cash treasure chest and go $33 big for 1 million shares. It was an absurd suggestion given where the stock was going. But the next day, the stock traded at $31.50.